LONDON — Boris Johnson confirmed Tuesday he will bring in a manifesto-busting tax rise as he moves to tackle a healthcare backlog caused by the COVID-19 pandemic and honor a pledge to fix a crisis in care.
The U.K. prime minister told the House of Commons that national insurance, a tax on income earmarked to pay for some state benefits, will rise by 1.25 percent in April 2022. Dividend taxes will also rise by 1.25 percent, in a bid to capture more high earners.
From April 2023, the new health and social levy will show on payslips, with working adults above pension age also contributing.
The move will raise almost £36 billion over the next three years and will, in the first instance, mainly be earmarked at addressing healthcare backlogs caused by the COVID-19 pandemic.
From 2023 it will be diverted to social care, which provides older and disabled people with help in day-to-day living, and sit alongside a new cap on the amount people have to contribute to their care in old age, set at £86,000.
Under the plans, those with £20,000 of assets will have care costs fully covered by the state and those with assets of between £20,000 and £100,000 will be expected to contribute to costs, but will also receive means-tested support. Over the three-year period, £5.3 billion — or just under 15 percent of the overall amount raised — will be spent on social care.
England’s care system has come under intense financial pressure in recent decades, with successive governments deferring decisions on reform. But the national insurance increase is a big political gamble for Johnson, as it is a direct breach of the Conservative Party’s 2019 general election manifesto in which Johnson personally promised not to raise key taxes. Johnson’s Cabinet agreed the plans Tuesday, and he is due to hold a press conference later Tuesday.
The prime minister told the House of Commons that governments had “ducked this problem for decades,” warning “there can be no more dither and delay.”
He accepted the plan broke his manifesto commitment, something he said he did not do “lightly,” but added: “A global pandemic was in no one’s manifesto, and I think the people of this country understand that in their bones.”
The announcement comes amid anger from some Conservative MPs. Steve Baker, the former Brexit minister, said over the weekend: “Of all the ways to break manifesto tax pledges to fund the NHS and social care, raising NIC must be the worst.”
It comes alongside a £5.4 billion cash injection to help the NHS tackle COVID-19 over the winter, announced on Monday.
